Now trending: Hot Stuff
Summer is an interesting time in the world of retail. With lazy vacation-stilted months in June and July and the comparatively bustling back-to-school energy of August, it is a season of contradictions. While, yes, the unique challenges and opportunities of summer sales patterns and scheduling are different than any other time of the year, understanding what is likely on tap for retailers this summer requires an appreciation for certain universal factors that play a role no matter what the calendar says.
One of those is the cause-and-effect nature of the industry. Retail is inherently a reactive enterprise, where retail sales, retail development and retail trends traditionally function as a kind of lagging indicator of larger social and economic trends. Where, when, why and how much we spend is dictated by the economic backdrop, and by what’s happening in the broader culture. In summer months, it’s vacations and school preparation that drive the agenda.
From a sales standpoint, the summer headline is always back-to-school shopping. Back-to-school merchandise has expanded dramatically over the years, and what was once exclusively the territory of pencils, composition books and maybe a couple of new outfits for the fall is now a full-on smorgasbord of items on the average family’s shopping list. In addition to school supplies, we see sales and purchasing trends encompassing everything from clothes and electronics to appliances and other home goods. In that environment, retailers like Target that serve as a one-stop-shop find themselves at an advantage.
Something else to watch for this summer is the continuation of another ongoing trend — back-to-school sales, which seem to start earlier and earlier with each passing year. In much the same way that holiday promotions are no longer a post-Thanksgiving phenomenon and now stretch all the way back into October (or even September), back-to-school sales have gradually begun to nibble away more of the summer calendar. Today, back-to-school sales have been picking up in mid-to-late July. Part of that may be in response to a school year that starts earlier in August in many parts of the country, but the primary driver is retailers essentially piggybacking on the mercantile back-to-school mood. Retailers have realized that they can, should, and in some cases, must take advantage of the extra traffic that back-to-school generates, and that it’s not just books and backpacks, anymore.
The first half of the summer is a very different environment, however. In June and early July, before back-to-school business picks up in earnest, shopping patterns tend to be focused around recreational activities and outdoor sales. While tourist markets and destination retail see a boom, those early summer sales numbers generally tend to be softer because of camps and vacation schedules.
One of the interesting aspects of breaking down summer sales is the fact that the numbers tend to be driven less by sector-specific trends than by geography. Granular market-based analyses are likely to have far more predictive results than broad generalizations based on brand or product type. For example, while suburban restaurants in Anytown, USA, might be a little slower when the mercury heats up in June, July and August, restaurants in beach towns and vacations destinations frequently have the summer months pegged. Some stores actually rely heavily on the summer rush to make their annual sales targets. Outside of the hot tourist and vacation markets, the summer slowdown can be particularly noticeable – especially in those warm weather destinations that often slash hotel and flight price points when tourist traffic slows. Phoenix in July, for example, is unlikely to be at the top of the average “Must See” list.
When it comes to retail expansion, the summer tends to be a similarly slow (perhaps even bordering on “sluggish”) period. Part of the reason for that is logistical hurdles in the summer that we don’t experience during other times of the year–outside of the Christmas/holiday season, at least. From zoning to site plan approval, permitting tends to slow down, as vacation schedules and travel plans play havoc with committee meetings and civic obligations. Lighter and more inconsistent calendars are common, and in some markets, zoning committees may not even meet during the summer months. Larger projects and ground-up development are especially impacted by this summer slowdown. So, while cash registers are still ringing, and business is still being conducted, it’s safe to say that summer never really gets going for retailers until the back-to-school promotions start to kick in. In that sense, summer is a season that truly plays by its own unique set of rules.